Chapter 10 ANTIGUA

t was a bad day for the Caribbean. TV channels dramatically flashed Breaking

News headlines: ‘Developments in the United States involving the Stanford

Group have profound implications for Antigua and Barbuda. This is not a

looming crisis. The fallout threatens immediate and catastrophic consequences.’

Rumours were confirmed on February 17, 2009, when Sir Allen Stanford was

charged by the US Securities and Exchange Commission with fraud and multiple

violations of U.S. securities laws, accused of massive ongoing fraud relating to

seven billion dollars in certificates of de posit.

For Malcolm Smeaton the effect was certainly immediate and damming. He, who

could in a certain sense have been described as an economic refugee, had elected

Dominica as his permanent home shortly after the Labour Party came to power in

the UK in 1997. He believed his homeland had been sold down the river to

foreigners. His prediction that the socialists would bring disaster to the country had

come true, albeit tardively, but the satisfaction it had given him faded when the

waves stirred up by the crisis suddenly struck the shores of his newly adopted

home.

I

As the news broke, queues were already forming outside of the Anglo-Dutch

Commonwealth Bank in Roseau. The rumour was rife that Malcolm Smeaton had

disappeared after Stanford’s bank had been seized by the authorities in nearby

Antigua. The FBI warned that fifty billion dollars of assets were in peril across the

Caribbean and in Latin America following the Texan cricket impresario’s

suspected banking fraud.

Fears that the Anglo-Dutch Commonwealth Bank could be contaminated spread

like wildfire and Smeaton’s absence was like oil to the flames. Stanford, who was

believed to have fled the USA in one of his many planes, held dual nationality with

an Antigua and Barbuda passport and the FBI suspected he had almost certainly

headed the Caribbean islands where he had many influential friends.

The billionaire banker had even donated money to Barrack Obama’s election

campaign and had sponsored charity polo matches in the UK, hosted by the Prince

of Wales. It was a field day for the press and there would be many red faces,

especially those who had fallen for his charm. In the long tradition of British

tabloids the sensational story was seized upon and Stanford’s face splashed across

front pages with reports of his numerous links to the world of sport that went well

beyond cricket; amongst them his sponsorship of football, tennis, golf and

basketball events. The scandal would leave sports supporters, a great many of

whom were the salt of Britain’s working classes, with a sour taste in their mouths

as they realized they had been taken for a ride by another thieving American

banker.

The news worsened when the FBI announced that the Stanford International Bank

was just the tip of the iceberg. It was evident that the collapse of Allen Stanford’s

bank would have far reaching implications given the Texan’s many connections

with clients and investors in the USA, Latin America and Europe. Fears grew in

Dominica as the suspicion that Smeaton’s Anglo-Dutch Commonwealth Bank had,

wittingly or unwittingly, been used as a conduit to fleece investors. Only two

weeks earlier Smeaton had hinted at losses related to the Madoff scandal.

Stanford, along with his associates in the Stanford Financial Group, was accused

of swindling thousands of investors of eight billion dollars by issuing supposedly

safe certificates of deposit from his Antigua and Barbuda based bank with

promises of attractive interest rates. The FBI declared that more than a quarter of

that money had disappeared in undisclosed personal loans to Stanford himself.

Barely five months had passed since Fitzwilliams with Smeaton, the latter

overflowing with Caribbean pride, had watched Stanford’s helicopter touch on the

grass of the Nursery Ground just behind the Lord’s cricket ground pavilion, home

to the Marylebone Cricket Club. The venerable club founded in 1787, was the

cradle of world cricket, with a thirty year waiting list for new members. The

billionaire, emerged apò mēchanēs theós, arms raised, wearing the smile of a

victorious hero returning home, greeted by the cries of his delirious fans. It was a

moment of incredible fervour as the officials of the English Cricket Board,

delirious with joy, hailed a new God.

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A twenty million dollar agreement was signed for five matches between the

England cricket team and a Stanford All-Stars eleven over a five year period. The

winning team would pocket eleven million dollars, one million for each player,

with a further million distributed amongst the other members of the squad, one

million for the management team, and seven million to be shared between the

English Cricket Board and the West Indies Cricket Board.

The two bankers, VIP guests, had been invited to the showbiz style press

conference. They watched the great names of cricket fawning over the tall beaming

Texan, their heads nodding in agreement as Stanford exposed his grand plans. The

crowning moment came when a transparent Perspex chest containing twenty

million dollars in fifty dollar bills was rolled onto the stage. Officials, sportsmen

and guests, gawked in amazement, it was if the Holy Grail had materialized. A

tabloid journalist reported that the venerable game of English cricket had been

transformed into a whole new ball game by the bronzed Texan.

Stanford flashed his now familiar smile, exposing an array of large whitened teeth

that set-off his ecstatic moustachioed face. He was bursting with childish bliss,

glowing in the boundless pleasure of his success, bathing in the glory of his

deification on the hallowed ground of English cricket. Cameras flashed and

television channels relayed the event live across the nation. Endless back slapping,

hugging and shaking hands followed. Champagne corks popped. Smeaton

introduced the hero to Fitzwilliams, and Stanford, who never missed an

opportunity, eagerly accepted Fitzwilliams’ invitation, as one successful banker to

another, to lunch with him in the spectacular dome of his headquarters overlooking

the City of London.

That grim Monday morning, in the capital of the Commonwealth of Dominica,

those euphoric moments were forgotten as a queue of anxious savers, desperate for

information, degenerated into an angry mob clamouring at the doors of the Anglo￾Dutch Commonwealth Bank. The island’s prime minister convened an emergency

meeting of the cabinet. The future of the tiny island hung by a thread, there was no

one who would come to their aid, no guarantees, and no Gordon Brown style

bailout.

In London, many were those who regretted ever having met the man, amongst

them Fitzwilliams, who anxiously awaited news from Smeaton.

In 2004, a Memorandum of Understanding was signed by the Commonwealth of

Dominica and the People’s Republic of China after diplomatic relations were

established between the two countries. The signing ceremony took place beneath

the familiar starred red Chinese flag and that of Dominica which figured a brightly

coloured parrot as its centre piece. It was a strange event to say the least,

incongruous in that the largest nation on earth with its population of over one and a

quarter billion was courting the tiny Caribbean nation with just seventy thousand

souls.

There was definitely something fishy as China promised an aid package of three

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hundred million dollars, nearly four hundred dollars for each Dominican. A casual

observer could have asked why China was ladling out such largesse. It was sure

and certain that very many Chinese had never heard of the Caribbean, not to mind

that tiny sun drenched speck named Dominica. Why were Dominican officials and

experts being trained and sent to seminars in China? Was it because the island was

strategically situated between French Guadeloupe and Martinique? Or was it

because of its relative proximity to the USA?

The French government in Paris was blissfully unaware of China cosying up to

their neighbour. The Chinese ambassador spoke of the China and Dominica in

equal terms, it was as though a buffalo and an ant had joined forces to exploit the

resources of the Caribbean. But competition in the international economic

environment, the struggle for resources and the acceleration of global warming,

was threatening small nations. It was strange to see China comparing the tiny

island nation with itself. The ambassador went on to say, ‘Closer relationship and

all-dimension cooperation are imperative to our two nations should we seek more

effective measures to better cope with such said challenges and others in kind, or

even to convert them into opportunities for the development of economy and the

improvement of people's livelihood.’

Would China help Dominica? And with what strings attached? Perhaps China

wanted to set up its own discrete offshore tax haven, far away from the preying

eyes of Hong Kong bankers, to hide the money creamed off by its corrupt

politicians and their fellow travellers? Or perhaps set up a casino to launder money

stolen from the people. Then there was the question of votes needed at the UN on

thorny subjects such as Taiwan and disputed islands in the South China Sea?

As Hubert, Arrowsmith’s garagiste jokingly remarked, mixing in his Creole,

‘Before china we was alive, some of allu do want to do nothiny for allu selfs, all i

hearing i hope that the chineese will do this and that but what is dominicans

problemb people don’t do things for nothiny, u must pay back some way or the

other.’

On second thoughts it would seem that China and the small Caribbean island

nation had something to offer each other. Since 2008, many small similar nations

had suffered as a result of the crisis. The sudden appearance of China ladling out

aid was naturally very tempting, but how many Caribbean leaders had read

Sophocles tragedy Ajax?

Nought from the Greeks towards me hath sped well.

So now I find that ancient proverb true,

Foes’ gifts are no gifts: profit bring they none.

But China was not alone in courting the island’s leaders, there was also

Venezuela. Hugo Chavez had first visited Dominica at the beginning of 2007,

arriving in a surreal show of helicopters and greeted by a rapturous crowd waving

Venezuelan, Cuban and Dominican flags. ‘Papa’ Chavez returned in June 2009,

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much to the consternation of Smeaton, and during his visit signed a series of agreements relating to tourism, housing, and economic development. However, the

principal object of his visit was the inauguration of a thirty-five million dollar oil

storage facility, situated near the capital of Roseau, established with the

Waitukubuli Oil Trading Corporation, Waitukubuli being the Carib Indian name for Dominica. Venezuela had agreed to supply Dominica with oil at preferential tariffs over a twenty-five years period, and in return, it was proposed that Dominica cede its claim to Bird Island, or Isla Aves, in favor of Venezuela. The small, but strategic rock, 375 meters long by 50 wide, lay some two hundred kilometers

directly west of Dominica in the Caribbean Sea.

The United Nations Convention defined territorial waters as twenty-two

kilometers offshore, in addition to this, was an exclusive economic zone extending

two hundred nautical miles over which a nation has control of all resources

including oil and gas with the right to exploit these for its own benefit. Thus the

implications of ceding its claims to Bird Island were enormous given the possible

existence of oil and gas in the 140,000 square kilometer exclusive economic zone

surrounding the island.

Dominica’s potential loss was colossal and many Islanders feared a Faustian pact.